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Comparison of screening devices

Author

Listed:
  • Frank Yang

    (Stanford University)

  • Piotr Dworczak

    (Northwestern University
    Group for Research in Applied Economics (GRAPE))

  • Mohammad Akbarpour

    (Stanford University)

Abstract

A designer relies on a costly screening device to allocate a set of goods, aiming to maximize a social welfare function. We provide conditions for one screening device to dominate another. We show that the performance of a screening device depends on two channels: (i) targeting effectiveness which measures the alignment between the implemented and desired assignments, and (ii) rent provision which determines the utilities of agents receiving the goods net of the screening costs. We link these two channels to distinct properties of the joint distribution of agents’ characteristics, leading to a number of simple empirical tests for comparing screening devices.

Suggested Citation

  • Frank Yang & Piotr Dworczak & Mohammad Akbarpour, 2023. "Comparison of screening devices," GRAPE Working Papers 83, GRAPE Group for Research in Applied Economics.
    • Handle: RePEc:fme:wpaper:83
    as

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    File URL: http://grape.org.pl/WP/83_Fang_website.pdf
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    More about this item

    Keywords

    mechanism design; stochastic orders; costly screening; inequality-aware market design;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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